Are We Living in a Reality TV Like World? How Does This Impact Business and Society?
Whoever Controls the Narrative, Wins Look around and watch what is going in the world around us and you would find that things are not they seem to be. While our business and political leaders proclaim all is well in front of the cameras, the situation on the ground deteriorates. Indeed, the rise of charismatic […]
The Need for Operational Definitions of Metrics
While coming up with operational metrics one must not forget to begin by first clarifying and defining what they mean. This is because there is a good chance that there may be ambiguity regarding what the metric really means. To better understand how to come up with operational definitions, the following procedure must be followed. […]
Building Decision Support System User Interface
Decision support systems are now widely used in organizations and military across the world, helping decision makers apply analytical, statistical and scientific techniques to decision making. In recent years, there popularity has significantly increased because of their ability to execute, interpret, analyze and suggest. Decision support systems can be used in the areas of economic […]
Approach to Exports and International Marketing Business Model
Today every individual entrepreneur owned businesses as well as Corporates have changed the way they look at their vision and business planning. Companies how ever big or small are no longer operating in domestic markets alone, for they have at their disposal the entire global market which is just waiting to be captured. The globalization […]
Quality – A Tool for Achieving Excellence
Introduction For an organization to be successful it is of paramount importance to exceed the customer expectations as to generate customer delight. One of the best ways of doing this is by providing quality products and services. In technical language, quality means to a product adhering to the specifications. For customer probably meeting or exceeding […]
Gone are the days when outsourcing meant a steady stream of jobs being shipped to India. Now the trend is for Indian companies to create jobs in the West. This phenomenon which is gathering pace in recent times is known as reverse outsourcing or the trend of Indian IT and BPO companies opening offices in the US and Europe to employ locals there.
This reverse outsourcing is estimated to have created nearly 300,000 jobs in the US. This is good news for Indian IT and BPO companies because they are battling the negative perceptions about outsourcing which is seen as a phenomenon that takes away jobs instead of creating them. Especially when one considers the fact that in a presidential election year, the anti-outsourcing rhetoric reaches a fever pitch, so this trend is welcome for the positive news it generates about Indian companies.
Moreover, other aspects like rising wages in India in the IT and BPO sector and the wild fluctuations in the foreign exchange market make Indian companies to contend with expenses that are mounting by the day.
The point here is that though the earnings of the Indian IT and BPO companies are in Dollars, they need to pay their wages in Rupees and hence, they have to absorb the costs of rising wages. So, it makes sense for the Indian companies to open offices and subsidiaries in low wage states like Ohio in the US and in the Czech Republic in Europe where they can benefit from lower costs and at the same time create jobs for locals. This double whammy benefit has indeed raised the image of Indian companies and has given the CEO’s of Western companies something to cheer about especially when they have to appear before committees and commissions made up of politicians to defend outsourcing.
The other aspect here has to do with Western companies preferring to do business with companies near shore or the emerging trend of near shoring. What this means is that many Western companies want to have their back office operations outsourced to locations that are nearer to their headquarters and hence, Indian companies are increasingly opening offices in places like Mexico and Ireland to cater to European clients and US. Though Indian companies have always had a significant proportion of their employees’ onsite, the trend of hiring locals instead of sending Indian employees onsite is picking up.
Finally, the fact that Indian companies have to contend with competition from Philippines and Vietnam has made them realize that they need to offer something more than the usual to grab market share and hence, the latest innovation is reverse outsourcing.
In conclusion, while it is too early to state whether this trend is sustainable in the longer term and whether it can ramp up considerably, the gains from this trend is that it has given an entirely new dimension to the practice of outsourcing and has the potential to be a game changer.
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